The U.S. Securities and Exchange Commission (SEC) has made a significant move in its ongoing legal battle against Ripple Labs, petitioning a New York judge to impose a hefty fine of $1.95 billion on the company. Stuart Alderoty, Ripple Labs' chief legal officer, has publicly criticized the SEC's action, promising a robust response from the company in the coming weeks.
The SEC's request, revealed in court filings, outlines a detailed breakdown of the proposed fine. It includes a demand for $876 million in disgorgement, $198 million in prejudgment interest, and an additional $876 million as a civil penalty. This substantial sum represents the latest escalation in the protracted legal dispute between the regulatory agency and Ripple Labs.
The legal saga began in December 2020 when the SEC initiated legal proceedings against Ripple Labs and its executives, alleging violations of federal securities laws related to the sale of XRP, the company's digital asset. While a ruling last July by New York Judge Analisa Torres found that certain aspects of XRP sales complied with U.S. law, it singled out Ripple's institutional sales of XRP as problematic.
In response to the SEC's motion, Stuart Alderoty voiced strong objections to the proposed fine, characterizing it as excessive and unjustified. He affirmed that Ripple Labs would vigorously contest the SEC's demands, with a formal response expected to be filed by April 22, 2024.